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Attrition: A primer on triage, treatment, and pre-emptive cures

For every sustained economic recovery, there is an inevitable increase in attrition; employees leaving their jobs to pursue opportunities with other companies.

This is certainly the case in the United States today. According to the US Department of Labor, voluntary terminations increased by 10.4% in calendar 2014. Concurrently, the creation of new jobs increased by 17%, while hiring increased at a rate of 8.1%. The fact hiring increased at a lower rate than the rate at which jobs are being created strongly implies that hiring fill times are also rising.

The ratio of unemployed candidates to job openings is also dropping like a rock. In December 2012, there were 3.4 unemployed candidates for every open job. By December 2013, there were 2.6 candidates per job opening. In December 2014, there were 1.8.

Unemployed candidates per open jobs

December 2012                    3.4
December 2013                    2.6
December 2014                    1.8
December 2015                  ___

While data is not yet available for calendar 2015, it’s obvious the job market is hotter in 2015 than it was in 2014, so the number of unemployed candidates per job opening has likely dropped even lower, below the 1.8 level last seen in 1997, the peak of the dot.com hiring era.

As the availability of unemployed or underemployed skilled talent has diminished, employers creating new jobs have been forced to source more and more of their new hires from their competitors, rather than the ranks of the un- or under-employed.

As a result, employers to increase headcount through their own hiring efforts, will likely find themselves doubly challenged to do so due to increased levels of attrition.

So what can you do to minimize or prevent attrition?

Since you can’t solve a problem you don’t understand, the first thing you’ve got to do is to identify the Who, the What and the Why driving your attrition. The simple, easy to understand triage process presented here will help you better understand your opportunities to mitigate unwanted attrition.

The Who

The first step in attrition analysis is determining the quality of the people you’re losing. If your company employs a formal review and ranking system, it should be relatively easy to determine whether you’re losing employees from the top, middle or bottom of their respective teams.

If the people you’re losing are low-end performers, your competitors may be doing you a favor, positioning you to upgrade your team with replacement hires. In fact, if your rewards system allows low end performers to be zeroed out on their merit increases, the attrition you’re experiencing may be exactly what you wanted to bring about to begin with.

But if you’re losing your performers from the upper 50% of your population, further analysis is definitely required.

The What

The second step in attrition analysis is determining if specific business units, operations, job families, or work teams are experiencing a higher rate of attrition than others.

If you determine that specific groups or classes of employees are leaving at a higher rate than others, you must then determine whether the higher attrition rate is due to internal factors that may be correctable, or if you’re in a situation where you’re being targeted as a recruiting source by one or more competitors.

The Why

The third and final step in attrition triage is determining whether the attrition is being driven by causes that may or may not be addressable; understanding the “Why” behind your employees’ decisions to leave.

It can sometimes be difficult to get people leaving your company to be completely honest as to why they’re making a change. Change driven by highly personal or emotional factors can be especially difficult to understand, as the employee may simply choose not to open up to anyone.

But in the event your analysis begins to uncover one or more causes for increased attrition, such as off-market pay rates, poor working conditions, or poor managerial treatment or practices, you may have an opportunity to stanch the outflow of talent by announcing plans to resolve the causes, then acting on the plans with urgency. Before designing your strategy, consider consulting your with your quality organization to understand how to differentiate between root causes and symptoms.

Alternatively, you may discover other employers are targeting your organization as a source for candidates with specific skills, knowledge, and experiences. You may find a competitor for talent has hired one of your people, and is coming back for more, or that a recruiter has identified you as a source of highly recruitable candidates.

If you find that you’re being targeted as a source, it becomes doubly important that you seek to understand and resolve the causes, the “Why”, behind employees choosing to leave your company.

The Proactive Approach to Attrition

The best time to guard against attrition, however, is when you’re interviewing candidates; before they ever join your company. If you can identify candidate characteristics and behaviors that will reliably predict a high probability of attrition, and interview for those characteristics and behaviors, you can integrate Potential for Longevity to your selection criteria.

While the characteristics and behaviors associated with attrition will differ from company to company, and industry to industry, here are four examples of characteristics and behaviors you may want to consider using as a starting point.

Visible and Hidden Job Hoppers

You may want to avoid candidates who tend to change jobs every 2 years, or less….even if they’ve stayed with a single employer! Everyone knows why you want to avoid hiring job hoppers, but candidates who have grown used to changing jobs every couple of years without changing employers may expect your company to give them the same opportunity.

When considering a candidate who’s moved a lot within a single company it’s important to understand how they feel about it. If that aspect of their current employment was something they really enjoyed and valued, you should be honest with yourself as to whether that type of career path is realistically available with your company. If not, you may be looking to hire someone with a good history of staying with a single employer…who’ll be looking to leave you in 2-3 years.

Candidates Preparing to Jump From One Frying Pan into Another

Understanding why candidates left their prior jobs is critical to any effort to preclude the hire of malcontents-to-be. If a candidate describes the reasons why they voluntarily left past companies, and you find yourself thinking “Wow, that’s exactly how it goes here,” you’re probably talking to someone who’s anxious to get out of a situation that’s likely to be replicated at your company.

Alternatively, you may get responses that make you think “Holy smokes, this person’s got a real strange way of looking at things.”

In either case, the candidate’s reasons…and reasoning…driving their past career decisions will provide you with insight as to how they will mesh with your team members, as well as how you can manage them to optimize the potential for both their success, and long term employment.

You’ve got to be especially careful with this type of candidate if they’re currently out of work, or working in an undesirable job. An unemployed or distressed candidate will be far more likely to accept a job they view as questionable, than a recruited candidate who is in a job, and doesn’t feel they have to find something new.

Candidates With No Clear Motivation

More specifically, this refers to candidates who have no idea, or an incorrect idea, as to why they want to join your company.

To evaluate candidate motivations, you’ve got to gain an understanding as to what a candidate believes will be different or better about your company than what they’ve experienced with their past employers. At a minimum, you’ll get the opportunity to correct any misperceptions the candidate may have about your company.

The best situation, in terms of avoiding the potential for attrition, is if the candidate wants to come to work for you because of a factor that is unique or specific to your company; something that is both real, and can’t be offered by other employers. Some examples of retention-driving motivations for change include:

Location: If joining your company will allow the candidate to either move to, or stay in a location that’s either highly desirable, or a non-negotiable gotta-have for them.

Products: If joining your company will give the candidate the opportunity to work on products or with processes that are extremely interesting to them, and relatively unique to your company.

Position: If joining your company will give the candidate the opportunity to move into a more desirable career path, or an organization with fewer barriers to upward movement.

Potential: If joining your company will give the candidate a higher level of opportunity to grow in a variety of ways due to the vertical and horizontal growth of the company.

If a candidate is motivated by factors that are not present, or present to a lesser extent than with other employers, you need to consider the impact of this fact on the probability of the candidate leaving sooner than later.

Candidates Positioned to Have a Bad Employment Experience

There are good and bad aspects to almost every job. But one person’s trash is another’s treasure, and for every challenging or distasteful job in the market, there’s a perfect candidate.

One way to mitigate the potential for attrition due to negative aspects or characteristics of a job is to simply make certain you present a balanced view of the job as a function of the interview process.

If there are difficult or unpleasant aspects of the job, don’t hide them; share them with the candidate, and ask if it will have an impact, positive or negative, on their decision-making process. Some examples of factors you should bring up, if they apply to the job, include any travel or remote working requirements, unique shifts or work hours, physical or environmental challenges, a high potential for physical or emotional stress, or working with difficult situations or people.

Once the candidate is aware of the things you consider to be difficult or unpleasant aspects of the job, they can then tell you whether they’ve worked in similar situations, and whether they consider it to be a negative.

Again, one person’s trash is another person’s treasure, and if a candidate accepts the position with full knowledge of the challenges associates with it, you’ve lessened the potential for attrition due to what you view as a difficult or unpleasant aspect of the job.

These are just four simplistic interview topics that will provide some level of insight as to the probability of a candidate becoming an attrition statistic.

If you choose to go through the triage and analysis process described here, evaluating the Who, What, and Why of your attrition experience, you’ll likely be able to identify the actionable causes of your attrition, as well as a user-specific set of attrition predictors you can integrate to your interviewing plans.

You don’t have to eliminate attrition to justify the efforts described here. Eliminating the loss of just 1-2 high value employees working in mission critical organizations will provide all the justification you’ll ever need.